LOGISTICS COST

MANAGEMENT
Revenue, Cost & Margins
 LOGISTICS COST
MANAGEMENT
 PRESENTED BY:
NAME OF THE STUDENT ROLL NUMBER
 ANITA AGARWAL 02
 DHAWAL AMBANI 03
 SUSHMA BHANDARI 04
 KIRAN BHILARE 06
 NILESH DESAI 10
 SANJOG DEVRUKHKAR 11
 BHAKTI JOSHI 14

MFM SEM – I (2008-11)

 PRESENTED TO: MISS GITIKA MAYANK

 LOGISTICS MANAGEMENT
INDUSTRY SEGMENT

 Logistics Management is that part of Supply Chain Management that

plans, implements, and controls the efficient, effective, forward, and
reverse flow and storage of goods, services, and related information
between the point of origin and the point of consumption in order to
meet customers’ requirements.
 ACTIVITIES / PRODUCTS
INVOLVED
 Customs Clearance

 Transportation

 Warehousing
(Multi location Invoicing)

 Distribution & Transportation

 CORE COMPETENCY AREA
CORE COMPETENCY AREA
Warehousing and Distribution ( Handled by self )

OTHER SERVICES
To be Outsourcers on cost plus basis
 Customs Clearance: By appointing external Custom House Agent
 Primary Transportation: By riding available market capacities
 Warehousing: By deploying own resources in Warehouses
 Distribution: Take responsibility and manage through vendor
 Business Model & Products

Air customs Movement from Port Movement from

Clearance to Customers Manufacturer to
Warehouse

Consolidation Customer
centre Manufacturer
Distribution &
Transportation
Délivre to end
Customer

Sea customs
Clearance & Supplier s abroad

Custom Clearance from Transportation of Transportation of Warehousing of Transportation of

Final Delivery
Sea port Cleared cargo manufactured good manufactured goods warehoused goods
 COST MODEL
 Controlling office Common resources for managing overall
business. Cost to be apportioned over each contract
 Resources in Location specific Activity will by part of
operating cost of location.
 Core activity like Warehousing, will have detailed costing
resources by resources.
 Outsourced activity will by cost plus hence only services
hiring cost is considered.
 Each contract will have 10% overheads to take care of
common resources cost.
 Business will be operated at nominal margin of 10 % to
establish in market, as entry strategy.
 INITIAL FOOTPRINT
 Controlling Office in Mumbai

 Operating locations & Branches

Offices at
-Mumbai
- Chennai
- Bangalore
- Delhi
- Kolkata
 CONTROLLING OFFICE
RESOURCES

 Office 2000 sq ft

 Manpower
- General Manager
- Head all India CC
- Head all India Transportation
- Head all India Warehousing and distribution
- Head Finance
- Support staff for all 5 above
 OPERATING LOCATION
BRANCH RESOURCES

 Office 500 sq ft

 Manpower
- Branch Manager
- - Customs Clearance - Business Development
- /Operations Manager

- Warehouse Manager
- Proposals & Business Development Executive
 INITIAL CORPUS REQUIRED

 Four months equivalent operating cost reflected in Revenue

progression sheet & Capital Expenditure involved in Core /
Warehousing activity.

 INR 0000000
 ASSUMPTIONS – REVENUE &
COST
 Customs Clearance Additional Business acquisition 20% per
month
 Primary Transportation is with reference to Customs
Clearance and will grow at same rate.
 Warehousing Revenue is steady and not growing throughout
the year as capacity created is fix. To increase / add
warehousing Revenue additional Capital expenditure need to
be planned.
 Head Office / Controlling Office Overhead are equally
apportioned over all branches.
 Branch Office overheads are apportioned only over business
under that branch.
DETAILED ACTIVITY COSTING
Core Activity : Warehousing

Warehousing Cost Model – 1

 REVENUE PROGRESSION

 Year to Date (YTD) and Year End Outlook (YEO)

 Revenue, Cost, Margin by Activity

 Break even level for Business

Refer Revenue Progression sheet

Revenue Working-1.xls
STATUTORY COMPLIANCE
ANALYSIS OF YEAR END
OUTLOOK

 Product wise Profitability

 Branch wise Profitability

 Break even for each branch

 Break even for all India Business

Each partner to present one branch.

 PLAN FOR NEXT YEAR

 Out of other three outsourced Activities convert one activity to

be handled in house through your own resources.

 Carryout detailed study on Resources and Costing for Customs

Clearance.

 Start Inducting Resources in Company suits to this business

plan.
BIBLIOGRAPHY

www.google.com
www.wikipedia.org
Expert Personnel from Logistic Industry